S.B. No. 324 mandates that state contractors, political subdivisions, and private employers in Texas participate in the federal E-Verify program to verify employment authorization for new employees. The bill amends Chapter 2264 of the Government Code, changing its heading to reflect "Certain Restrictions on Public Subsidies and State Contracts." It introduces new sections that outline the requirements for contractors to register and participate in the E-Verify program, including a stipulation that contracts with state agencies must include a certification statement regarding the contractor's eligibility under the new regulations. Additionally, the bill establishes procedures for barring contractors from state contracts if they fail to comply with E-Verify requirements.

The legislation also adds provisions to the Labor Code and Local Government Code, requiring employers and political subdivisions to verify employee information through E-Verify. Employers are prohibited from misclassifying employees as independent contractors to evade these requirements. The bill outlines enforcement mechanisms, including the potential for immediate termination of employees responsible for compliance failures within political subdivisions. The effective date for the new regulations is set for September 1, 2025, with specific compliance deadlines for state agencies and local governments to develop necessary procedures and rules.

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